Extended Hours Overview

Schwab displays and executes extended hours orders through a leading Electronic Market (either an Electronic Communications Network or an Electronic Stock Exchange). This Electronic Market may have relationships with other Electronic Markets that participate in an extended hours trading network in order to provide access to orders or prices available on these other participating Electronic Markets.

• Separate Trading Session—Schwab's Extended Hours Trading offering has two components, the Pre-Market Trading session and After Hours Trading session. These are completely independent from the standard trading session. Extended hours orders must be placed on the special Extended Hours Trading screens at schwab.com, or by calling us at 800-435-4000 and asking for an Extended Hours Trading representative.

• Commissions and Trade Settlement—Commissions for extended hours trading are based on Schwab's standard fee and commission schedule. Please note that the commissions for trades executed in multiple sessions (i.e. Pre-Market, standard or After Hours) are not aggregated. Extended hours trades will normally settle one business day from the date the order is executed, just like orders placed during standard market hours.

Standard Market vs. Extended Hours Sessions

Standard Market	Pre-Market and After Hours Trading
Orders can be placed at any time and will only be executed from 9:30 a.m. to 4:00 p.m. ET.1	Pre-Market: Orders can be placed between 8:05 p.m. (previous trading day) and 9:25 a.m. ET and will be eligible for execution between 7:00 a.m. and 9:25 a.m. ET. After Hours: Orders can be placed and are eligible for execution between 4:05 p.m. and 8:00 p.m. ET.
Trading primarily occurs on exchanges (NYSE Euronext, AMEX and other regionals) and on NASDAQ through a variety of venues including market makers and ECNs.	Trading occurs through a leading Electronic Market.
Many order types and restrictions are accepted. Including: market, limit, stop-limit, all-or-none, etc.	Only limit orders for the particular Extended Hours session are accepted.
All order sizes are accepted.	25,000 shares is the maximum quantity on a single order.
Many security types are available. Including: stocks, options, bonds, mutual funds, etc.	Most listed and NASDAQ securities are available in the extended hours session.
Different time limits are available. Including: Day, GTC, IOC and FOK	All orders are only good for the particular session in which they are placed. There is no carryover into any following session.
In general higher trading activity means more liquidity and a greater likelihood of order execution.	Lower trading activity may result in lower likelihood of order execution, plus wider spreads and greater price fluctuation.
The quotes you receive are consolidated and represent the best available prices across all trading venues. Market makers and specialists work to ensure customers get the best buy or sell prices displayed on NASDAQ and the exchanges.	Quotes are not consolidated and represent the current prices available through the Electronic Market. As a participant in the Extended Hours Trading Network, the Electronic Market may also offer access to prices available on other participating Electronic Markets, but not necessarily all venues open for EHT.

1. Extended Hours Trading Sessions will not take place on official Exchange holidays or when the Exchanges close early. Schwab reserves the right to change or modify hours of operation for extended hours trading at any time. A Schwab Extended Hours Trading Session, or any security traded therein, may be temporarily or permanently suspended without prior notice at any time at our discretion.

What is an Electronic Market?

An Electronic Market (either an Electronic Communications Network or an Electronic Stock Exchange) is a computerized trading network or market used to display and execute limit orders. Professional traders, such as those who trade for big financial institutions, have been using Electronic Markets for over 15 years now.

How does it work?

An Electronic Market is simply a matching service set up to match buy and sell orders. For example, if there are no sell orders for a particular stock displayed on an Electronic Markets, an investor who places an order to buy that stock has to wait for a matching sell order to come in before an order execution can take place.

The result?

Buyers and sellers trading through an Electronic Markets may experience significant delays before their orders are filled, and some orders may not be executed at all.

Because of limited trading activity in the extended hours, the difference, or spread, between available buy and sell orders is likely to be greater than during standard market hours. Higher spreads often result in more volatile prices. But remember, when you place an extended hours limit order, although there is no guarantee your order will be filled, you are assured your limit order price if your order is executed.

Order Routing

For extended hours sessions, orders are routed to an Electronic Market. An Electronic Market may have the ability to execute some orders on other Electronic Markets and may attempt to do so if executing your order on another Electronic Market is to your benefit.

Extended Hours Quotes

You can get an extended hours quote through the client center in either of two ways: by using the Quick Quote feature that appears at the top of the screen; or from within the Research tab. In either case, enter the symbol of the security for which you want an extended hours quote, followed by a ".e". The ".e" is the extended hours designation. For example, to receive an extended hours quote for symbol "ABCD" you would enter "ABCD.e".

• A standard hours quote vs. an extended hours quote—While an extended hours session is taking place, you can still obtain a quote from the standard market session. Simply request a quote without appending an ".e" to receive a standard market quote.
  
• Reading an extended hours quote—An extended hours quote is different from a standard market quote. One significant difference is that there is currently no accurate trade volume available for extended hours trading. Extended hours quotes reflect the best bid and ask orders currently available.
  
  Use the following information to help you read an extended hours quote:
  
  "Previous Close" represents the closing price of the most recent standard session from the primary market on which the security trades.
  
  "Bid" is the highest price at which someone is willing to buy a security.
  
  "Size" is the market term used to describe the number of shares quoted at a particular price.
  
  "Ask" is the lowest price at which someone is willing to sell a security. "Quote Time/Date" is the time that the bid/ask was last updated.
  
  If the bid or the ask shows "N/A," it means that there is currently no buy (bid) or sell (ask) order available.
  
  
• Using extended hours quotes—Before placing an order in the extended hours session, check the extended hours quote for that security. During standard market hours, quotes and last sales reports are consolidated. Extended hours quotes and last sales reports are not consolidated across all Electronic Markets. Extended hours quotes and prices will represent the best prices available at that time only through Electronic Markets that may be participating in the Extended Hours Trading Network. Quotes and last sale prices may vary widely from one Electronic Market to another.

Important Considerations

Extended hours trading is likely to involve limited trading activity compared to the trading activity during standard market. This may make it more difficult to obtain order executions, and may entail other risks such as those listed below:

Quotes—During standard market hours, quotes and last sales reports are consolidated. Extended hours quotes and last sales reports are not consolidated across all Electronic Markets. Extended hours quotes and prices will represent the best prices available at that time only through Electronic Markets that may be participating in the Extended Hours Trading Network. Quotes and last sale prices may vary widely from one Electronic Market to another.

Prices—Due to limited trading activity, stocks may experience greater price fluctuation and wider spreads during Extended Hours than during standard market hours.

Next Day Opening Prices—In the course of your own investing, you may have noticed that the opening price of stock does not always match the closing price of that stock from the previous trading session. Investors who place market orders for execution during the next trading session should be aware that a number of factors can influence the price of a stock between market close and market open:

• Publicly traded companies often wait until the markets close at 4:00 p.m. ET to make major news announcements such as earnings reports. These announcements can and often do affect both extended hours trading activity and next day opening prices.
• Orders placed after the major exchanges have closed accumulate overnight and are evaluated by specialists and market makers before the market opens the following morning. The supply and demand indicated by these orders is one of the factors market makers use in determining the opening price of a stock.
• Professional investors (brokers and institutional traders) have been trading in the extended hours for many years already. Their extended hours trading activity (based on news announcements, their own analysis and other considerations) can also influence the opening price of a stock.

As individual investors begin trading in the extended hours, their trading activity will also have an influence on the next day opening price.

Liquidity—Lower trading activity may result in a lower likelihood of your order being executed. In addition, there may be a number of orders ahead of yours that will be filled by incoming matching orders before your order can be filled. It is possible that your order will not be executed at all, or only partially executed. Unexecuted orders will be canceled at the end of the particular Extended Hours Trading session.

Competition—Many extended hours traders are professionals with large institutions, and may have access to more current information than individual investors.

News—News stories released after the close of the markets may create wide price fluctuations in extended hours trading. Schwab recommends that you check the news available at schwab.com as well as other news services before trading in the extended hours sessions.

Multiple Account Holders/Power of attorney—For multiple account holders and customers who have granted power of attorney (POA) on their accounts: If any account holder or the individual(s) to whom you have granted POA are interested in extended hours trading, you should discuss the appropriateness of extended hours trading with each other before participating in Schwab's Extended Hours sessions. For more information, look in the Customer Center under Agreements, or call us at 800-435-4000 for a copy of the Extended Hours Trading Disclosure Agreement.

Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value (“IIV”)—For certain Derivative Securities Products, an updated underlying index value or IIV may not be calculated or publicly disseminated in extended trading hours. Since the underlying index value and IIV are not calculated or widely disseminated during the pre-market and post-market sessions an investor who is unable to calculate implied values for certain Derivative Securities Products in those sessions may be at a disadvantage to market professionals.